Last updated on May 18, 2022
The Voluntary Sector (also known as the third sector, nonprofit sector, and community sector) is usually comprised of organizations whose purpose is to benefit and enrich society, often without profit as a motive and with little or no government intervention.
Unlike the private sector where the generation and return of profit to its owners is emphasized, money raised or earned by an organization in the voluntary sector is usually invested back into the community or the organization itself.
One way to think of the voluntary sector is that its purpose is to create social wealth rather than material wealth.
Although the voluntary sector is separate from the public sector, many organizations are often tightly integrated with governments on all levels to support it in the delivery of programs and services.
Examples of the Voluntary Sector
There are many different types of organizations in the voluntary sector.
Some of these organizations have a mix of paid and volunteer staff, like most charities. Other organizations are much more loosely defined, like community groups, and can be composed entirely of volunteers.
Examples of organizations in the voluntary sector include:
- Charities: World Vision, American Red Cross, YWCA
- Foundations: David Suzuki Foundation, Bill and Melinda Gates Foundation
- Social Welfare Organizations: Human Rights Watch, Environmental Protection Agency (EPA)
- Advocacy Groups: Privacy International, World Wildlife Fund
- Faith-Based Organizations: Churches, Mosques, Temples
- Community Groups: Neighbourhood Watch, Knitting
- Recreational Sports: Ultimate Frisbee, Running Clubs
The National Center of Charitable Statistics (used by the IRS to classify nonprofits) divides nonprofits into 26 major groups under 10 broad categories.
Size of the Voluntary Sector
There are different estimates for the size, income, and activities of organizations in the voluntary sector.
In the US, the voluntary sector contributed an estimated $905.9b to the US economy in 2013, or 5.4% of the country’s gross domestic product (GDP).
In Canada, the voluntary sector accounts for 6.8% of the nation’s gross domestic product (GDP) and employs 12% of Canada’s economically active population (reported in 2005).
In the UK, it is estimated that the voluntary sector contributes £11.7 billion to UK gross value added (GVA, similar to a GDP), equivalent to 0.8% of the whole of the UK GVA (reported in 2012).
In 2014, the voluntary sector accounted for approximately 13% of the total EU workforce, or 23 million full-time equivalents.
History and the Future of the Voluntary Sector
The history of the voluntary sector dates back to the 19th century when philanthropists and social reformers began to establish organizations to tackle poverty and injustice. The sector has since grown and evolved, responding to the changing needs of society. Today, the sector is an essential part of the social fabric, with millions of people working to make the world a better place.
However, the voluntary sector is facing a number of challenges in the 21st century. Funding is becoming increasingly scarce, as government budgets are cut and philanthropy dries up. In addition, the sector is coming under increasing scrutiny, as the public demands more accountability and transparency. The sector is facing competition from a new wave of social enterprises that are motivated by profit as well as social good.
Despite these challenges, the future of the voluntary sector is bright. The sector is adaptable and resilient, and has a proven track record of delivering social change. The sector is also growing in popularity, as more and more people are looking for ways to make a difference.